Enrolling Stakeholders under Conditions of Risk and Uncertainty

Abstract

Research summary: Entrepreneurs often need resources controlled by stakeholders to form and exploit opportunities. While many of these resources can be acquired through simple contracts, the acquisition of some may require efforts on the part of stakeholders that go beyond what can be specified contractually. Such efforts-extra-role behaviors-generally involve the formation of deep psychological bonds between stakeholders and entrepreneurial endeavors. In an entrepreneurial context, the process of creating these bonds can be called stakeholder enrollment. Critical attributes of this process are shown to vary by the informational setting (risky or uncertain) within which entrepreneurship takes place. Managerial summary:Entrepreneurs often need to gain access to resources controlled by other stakeholders to be successful. In some cases, entrepreneurs must induce these stakeholders to form deep psychological bonds in order to obtain the required resources. The process of creating these bonds is called stakeholder enrollment. This article notes that entrepreneurs can use information about the nature of the opportunity they are pursuing, information about themselves (i.e., the entrepreneurs' charisma, trustworthiness, and reputation), or both, to enroll stakeholders. This article suggests that the more uncertain a particular opportunity is, the less entrepreneurs can use information about the opportunity and the more they must rely on information about themselves to successfully enroll stakeholders. Stakeholder enrollment under uncertaintyOf course, not all entrepreneurial settings are risky. When neither the possible outcomes associated with B. L. Burns et al.

Strategies and Tools for Entrepreneurial Resource Access: A Cross‐disciplinary Review and Typology

“…It also incorporates the concept of ‘stakeholder enrollment’ (a form of psychological commitment) to explicate what may determine the level of resource support on the part of external resource providers (Burns et al . ).…”

“…Research drawing from a social-psychological or psychological tradition also recognizes the role of legitimacy, but pays greater attention to the way in which the content and the form of the words used by entrepreneurs affects how message recipients perceive and make sense of the information being conveyed. It also incorporates the concept of 'stakeholder enrollment' (a form of psychological commitment) to explicate what may determine the level of resource support on the part of external resource providers (Burns et al 2016).…”

“…These findings suggest that the way in which entrepreneurs frame the informational content of their appeals may influence resource providers above and beyond the substantive information conveyed. Furthermore, it has been theorized (although not empirically tested) that, in order to psychologically commit external resource providers, entrepreneurs must emphasize different types of informational content, depending on whether they find themselves in a situation of risk or uncertainty (Burns et al 2016). Specifically, the more uncertain a particular opportunity is, the less entrepreneurs can use information about the opportunity itself, and the more they must rely on information about themselves to enroll external stakeholders successfully.…”

Prediction and control: An agent‐based simulation of search processes in the entrepreneurial problem space

“…This work shares common ground with extant literature in strategic management on corporate vision and shaping strategies (Hamel & Prahalad, ; Rindova & Fombrun, ; Santos & Eisenhardt, ) and recent conceptual work on entrepreneurial theories (e.g., Felin & Zenger, ). A growing empirical literature provides promising insights about the processes through which entrepreneurs shape their environment through the enrollment of stakeholders critical to co‐creation of economic artifacts (Burns, Barney, Angus, & Herrick, ; Read et al, 2009b; Reymen et al, ; Wiltbank et al, ). Though these insights are provocative, several studies note that the testing of the specific mechanisms involved has been slow going (Read & Sarasvathy, ; Welter et al, ).…”

Extending the Economic Foundations of Entrepreneurship Research

“…Is it correct that uncertainty is not quantifiable, as many theorists have suggested (Knight, [1921]; von Mises, [1949])? How does entrepreneurial performance change under conditions of risk versus uncertainty (Burns et al, )? Do entrepreneurs perceive different types of uncertainty?…”